Wednesday, January 9, 2008

Innovation is an ongoing process. Bill Buxton likes to call it The Long Nose of Innovation. He describes the phenomenon as the bulk of innovation behind the latest "wow" moment (multi-touch on the iPhone, for example) is also low-amplitude and takes place over a long period—but well before the "new" idea has become generally known, much less reached the tipping point. He has given quite few examples in his post emphasizing that it is all about idea refinement and innovating around the existing technology. It is naive to throw away an idea just because it is old or not "new enough". Few other bloggers have also picked up the story and Techdirt makes an argument that innovation is not a burst of inspiration but merely a process.

Google search and Gmail are the examples that reinforces this phenomenon. When Google launched the search, people said "what, one more search engine?" Gmail was quite late in the email game, but it forced other web-based email providers to shell out extra storage space. Gmail gained significant market share based on the large storage feature and by providing better customer experience.

AJAX is also an example in this direction. The technology support in the browser for AJAX-based applications was available way before the AJAX term was coined or these applications started becoming popular. Gmail heavily used AJAX to innovate around better user experience . So, watch out, what you need is available right around the corner. What you thought was a silly or an old idea may not be silly anymore. IDEO has a "Tech Box" that is a centrally located lending library of innovation elements. Basically, it is a box that contains all kinds of materials, gadgets etc. Many visitors call it a magic box that contains many IDEO innovations, but for IDEO it is a mindset and a physical statement. IDEO team members look into this Tech Box for materials when they are designing or shall I say innovating the next product.

Finding user's right pain-point and provide better experience is a key to this long nose of innovation.

Monday, January 7, 2008

The PartnerUp has compiled a long list of technology and web acquisitions in 2007. It is not a complete list and does omit many acquisitions but it is an interesting list that shows a clear trend that the smaller acquisitions have been more frequent. I welcome this change since it allows the acquiring companies to try out the innovation at the prototype level, explore synergies, and add value to it, or toss it out. They can refine and iterate on alternatives without worrying upfront about return on the investment. I see a lot of value in big companies using their cash to try out the outside-in-perspectives and not just rely on their internal innovation engine early on.

This is certainly better than buying the "startups" at the later stage and pay through the noses due to the ridiculous artificial valuation that these "startups" get and after the acquisition not being able to figure out what to do. Skype's acquisition by eBay is an example of one of these scenarios where eBay still cannot find the synergies and monetize the acquisition.